Microsoft: Navision no threat to SAP relationship

Microsoft Corp.'s acquisition of Danish application developer Navision A/S could be seen as a move into the territory of German ERP (enterprise resource planning) system vendor SAP AG, especially since some divisions of companies in SAP's target market also use Navision's software. But Microsoft's relationship with SAP is not threatened by the purchase, according to Jean-Philippe Courtois, Microsoft president for Europe, the Middle East and Africa (EMEA).

"Navision has been focusing on midsize companies. The core goal is not to provide ERP and CRM (customer relationship management) software to the bigger companies, the goal is to address a market which is very fragmented, where there are many local players," Courtois said in an interview with Peter Sondergaard, Gartner Inc.'s vice president of research for Europe, on stage here at Gartner's Symposium/ITxpo conference.

SAP and Microsoft will continue to work together because "more than 60 percent of SAP installations are on Windows now, not just on Windows but running on SQL Server too," Courtois said.

And the relationship will deepen: "We are working with SAP on integrating SAP into the .Net environment so you can integrate it with Biztalk server," he added.

That's as far as Microsoft's encroachment on enterprise software developers' territory will go, though, Courtois said. "We announced CRM products a couple of months ago, but we are not trying to design an enterprise CRM product. That's very different. We just do the basics," he said, adding that the market for simpler CRM systems is wide open.

The relationship with SAP was just one of the topics covered in a wide-ranging discussion between Courtois and Sondergaard, which began with Courtois' arrival on stage toting a Tablet PC. A skeptical Sondergaard asked whether the device, more expensive than a standard laptop, can succeed when most business users are concerned about cutting costs.

"Yes, this will be a little more expensive than a typical laptop, maybe (US)$150 more," Courtois said, but, "As people get used again to taking notes on the fly, I think it's going to save a lot of time for many people, managing information."

Courtois was clearly in good spirits following Friday's court decision in the U.S., widely seen as favorable to Microsoft, but the company has yet to hear the outcome of a similar antitrust investigation in the European Union.

"In Europe there were two cases, narrowed down to one, about integration and interoperability. I think that now that the case has been decided in the U.S., it is time for the E.U. to make a decision," Courtois said.

Microsoft has already gone some way to complying with the remedy judgement, including releasing details of 290 APIs (application programming interfaces) and allowing companies to license any of 113 communication protocols.

These communication protocols are essential if the components of Microsoft's .Net initiative are to talk to one another and make the initiative a success, said Courtois.

What users want, though, is not abstract details of communication protocols but rather Microsoft software that can interoperate with that of other vendors, said Sondergaard.

Microsoft is aiming for interoperability through the use of protocols like XML (Extensible Markup Language), SOAP (Simple Object Access Protocol) and UDDI (Universal Description, Discovery and Integration), a standard for Web services, Courtois said.

And for applications not yet ready for the Web services approach, he cited the three-quarters of the company's 7,000 employees in Europe dedicated to its 5,000 largest clients, many of them involved in integration efforts.

When it comes to operating systems, there's really no reason to use rival operating systems like Linux, Courtois said. The most commonly cited argument in favor of Linux, its price, is a red herring, he said.

"People say Linux is free," he said, referring to the zero license cost of Linux, "but there's no free lunch." In studies conducted by Microsoft, he said, "In 95 percent of cases, total cost of ownership was better on the Windows platform. The cost of the license is only 5 percent of the total."

When it comes to desktop applications, it's not cost that will keep people in Microsoft's camp, but inertia. Users thinking of switching from the Microsoft Office productivity suite to, for example, Sun Microsystems Inc.'s StarOffice suite face a number of issues, "one of the most obvious of which is compatibility with what their business has done in the past, and with companies they exchange information with," Courtois said.

While Sun claims near-perfect compatibility between the file formats of current versions of the two products, that won't necessarily be the case for future versions, unless Microsoft adds the file format for the current version of Office to the list of APIs it has disclosed.

One other area where users would appreciate more openness from Microsoft is its trusted computing project.

"We have learned the lesson that we need to be much more out in front" about trusted computing, Courtois said. There's a lot more work that needs to be done with chip makers, government bodies and others in order to have secure transactions end to end, he said.

"In the short term, in terms of security, and in terms of trust, I hope we can do better as a company," he said. "We are trying very hard."

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